MUMBAI, INDIA—Finance Secretary Carlos Dominguez III has sought the support of the Asian Infrastructure Investment Bank (AIIB) in funding other big-ticket infrastructure projects under the Duterte administration’s “Build, Build, Build” program following the institution’s approval last year of its first project in the Philippines in partnership with the World Bank.
Dominguez underscored the urgency of developing both the physical and digital infrastructure of the Philippines and other emerging economies in Asia to hasten the development of a common market across the region and transform Southeast Asia into a strong base for trade.
“A dynamic regional common market will provide our economies a strong base to build competitive industries and profitably trade with the rest of the world. An emergent Southeast Asia will complement the mature economies of East Asia and the rapidly growing Indian subcontinent,” said Dominguez during the Asian Infrastructure Forum (AIF) seminar on “Advancing Together: ASEAN Infrastructure Development” held at the Experimental Theatre of the National Centre for the Performing Arts here.
Dominguez said, “this arc of progress will constitute the center of gravity of the global economy, the engine of economic expansion that will help propel all other economies.”
In the Philippines, Dominguez said its massive infrastructure buildup has been made possible by the expanded support of its friends in the region as well as of multilateral agenies such as the AIIB.
The AII has so far committed to co-finance with the World Bank the first phase of the Metro Manila Flood Management Project, which will be built to improve flood forecasting, reduce long-term flooding and modernize pumping stations and build new ones in the National Capital Region and its surrounding areas.
Among the projects that the Philippines has pitched to the AIIB for possible financing support are the Metro Manila Bus Rapid Transit System (Phase 3 from Bonifacio Global City to Ninoy Aquino International Airport), the Pasacao-Balatan Tourism Coastal Highway in Camarines Sur, and the Camarines Sur Expressway Project (San Fernando-Pili Section).
“We are hopeful that with the approval of the funding for this project, the AIIB would find it feasible to invest in other big-ticket infrastructure projects under the Duterte administration’s “Build, Build, Build” program,” Dominguez said.
Dominguez was among the inaugural speakers at the first set of seminars of the AIF following its launching here on Thursday (June 26).
The AIF aims to gather policy makers and experts involved in infrastructure development in practical and project-driven discussions that focus on matching innovative financing programs to critical infrastructure needs.
Joining Dominguez at the panel discussion during the AIF seminar were Singapore’s Finance Minister Heng Swee Keat, Indonesia’s Minister of National Development Planning Bambang P.S. Brodjonegoro, Preeti Saran, Secretary (East) of India’s Ministry of External Affairs, and Kevan Watts, vice chairman for global banking of HSBC.
Dominguez said the initiative to improve infrastructure across the region, which is the AIIB’s primary goal, “will help stimulate economic activity in all our economies and help us build inclusive growth for our people” in the immediate term, and “improve the interconnectivity of the region’s economies and foster productive exchange” over the longer term.
“The Philippines understands the urgency of building up our infrastructure base,” Dominguez said. “We subscribe to the objective of enhancing regional connectivity. We grasp the strategic importance of developing the Southeast Asian region as a strong base for trade.”
Dominguez said this is why President Duterte launched the “Build, Build, Build” program, which involves 75 high-impact projects, of which 35 have already hurdled the approval processes and are ready for execution.
Ten of these projects are moving into the construction stage this year, with 25.4 percent of the national budget committed to infrastructure investments, which is equivalent to 6.3 percent of the Philippines’ gross domestic product (GDP).
By 2022, Dominguez said the government projects public spending on infrastructure to increase to 7.3 percent of GDP.
“This is the highest investment in infrastructure in our history and, as a percentage of GDP, possibly the highest in the region,” Dominguez said.
Such massive spending has been made possible by the Duterte administration’s comprehensive tax reform program (CTRP), which has now started to ensure steady and reliable revenue flows for the government, he said.
Dominguez said the government has also been encouraging the private sector to invest in infrastructure, citing as examples the tollways being operated by the private sector and the expansion of the international airport in Manila, which will be done through private investments.
Hybrid Public-Private Partnership (PPP) models, in which the government begins the implementation of the projects and transfers their operation and maintenance to the private sector, is also being carried out to hasten the execution of projects.
“The ‘Build, Build, Build’ program doubles the capacity of our domestic economy to provide employment for our people. With its multiplier effects, it will help stimulate economic activity and help us raise growth even further,” Dominguez said. “With the efficiencies created by modern infrastructure, we encourage investments nationwide. This will pave the way for a shift from consumption-driven to investments-led development for the country.”
The 10 “Build, Build, Build” projects set to start construction this year are worth a combined P59.759 billion.
These are the: 1) Phase 1 of the P35.257-billion Mindanao Rail Project (Tagum-Davao-Digos Segment), 2) P4.607-billion Binondo-Intramuros Bridge, 3) P1.367-billion Estrella-Pantaleon Bridge, 4) P4.372-billion Chico River Pump Irrigation Project; 5) P1.780-billion Clark Green City Government Center, 6)P850-million Clark Green City Commercial Center, 7) P3.331 -billion Clark Green City Mixed Income Housing, 8) P2.335-billion operations and maintenance of the New Bohol Airport, 9) P4.858-billion Panguil Bay Bridge Project, and the 10) P1-billion drainage improvement of the remaining sections along Pasig River from Delpan Bridge to Napindan Channel.
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